A New Technological Order
Bruno Maçães highlights the increasing age of competition between economic blocs and spheres of influence, which is being accelerated by climate policies
By Bruno Maçães
Forget about the climate crisis as a moment to overcome geopolitics. More likely, geopolitics will be more present than ever. As David Wallace-Wells recently argued, we should brace ourselves for a future of intense state competition, a new scramble for territory. There will be fights for new resources, with demand for the materials in solar panels tripling or more over the next few decades, and the need for battery ingredients like cobalt, lithium, and other rare earths growing so quickly that countries will be forced to scramble for control over specific geographies:
“That is, mines all around the world opened to disgorge resources at a rate much faster than those that powered the global industrial revolution over centuries, and in ways that invariably generate state conflict.”
If the climate crisis will inaugurate a new economic and technological model, the last thing we should expect is that the transition will be a peaceful one. What history teaches us is that moments of transition are understood by state actors as a threat and an opportunity, rare moments when new orders may be created and new states may ascend to the commanding heights. It was, after all, by leading the fossil fuel revolution that England became the ruler of a global empire, and the United States took advantage of a similar opportunity by leading the technological transformations of the Second Industrial Revolution.
In September 2020, Xi Jinping announced a plan to achieve carbon neutrality before 2060. If China were to achieve its announced goal, it would lower global warming projections by around 0.2 to 0.3°C, the biggest single reduction ever estimated by the Climate Action Tracker. Assuming full implementation of the Paris “pledges and targets”, without the new China announcement, the CAT estimates global temperature increase will be 2.7°C by 2100. The Chinese announcement would lower it to around 2.4 to 2.5°C.
Traditionally, of course, it is the capacity to mobilise resources that stands as a marker of national power. How was it possible that a country so obsessively committed to the goal of national rejuvenation was now announcing what Pierre Charbonnier calls a “program of fossil disarmament”? If we knew something about China and climate, that was surely that the country has long held that wealthier nations, who benefited from earlier industrialisation, should carry most of the economic burden for preventing catastrophic warming. What has changed?
The answer is that China is not so much announcing a retreat from a technological model as the beginning of a new one. The country leads the world in clean energy investment, with its current level of investment in climate change being approximately equal to that of the United States and the European Union combined.
A lot is at stake. As each economic bloc increasingly focuses on specific technologies, it must make sure that those technologies become dominant, providing something of a global standard. The European Union has actively bet on hydrogen. Countries in East Asia are racing to develop solid-state battery technology. The goal is to control as many of the key technologies powering the climate economy. No country can expect to lead the process without a firm commitment to decarbonise.
The European Green Deal could have a major impact on Russia, a country heavily dependent on exports of fossil fuels to the European Union. 2025 could become an inflection point for the critical automobile industry, the moment when electric and combustion vehicles are projected to cost the same. Countries in East Asia are racing to develop the battery technology of the future, and China is developing integrated supply chains for electric cars in Indonesia. European companies are still world leaders in wind turbines and Germany is striving for global leadership in hydrogen technology, but China is quickly catching up even in these areas. Where China is still lagging, as one perceptive report notes, is in “breakthrough innovation that can alter entire markets and create paradigm shifts.”
Initial estimates suggest that China’s pledge made in September to go carbon neutral could involve a total investment of up to $15 trillion. If even a small fraction of that amount is invested in transformative clean energy technologies like fusion power, that could mean Chinese firms are more likely to own the intellectual property that powers the planet at the end of this century. Thegoal is to control as many of the key technologies powering the climate economy. “Just as the advent of coal and oil remade the world, clean energy is set to do the same. The energy transition will not only cut emissions: it will redistribute power.” The fact that China has continued to invest in coal power — the country built over three times as much coal plant capacity as the rest of the world in 2020 — may seem at odds with its bold climate goals, but the contradiction disappears once we understand that what Chinese authorities envision is a diverse industrial base where investment in emerging technologies can go together with less advanced sectors for as long as those remain marginally profitable.
In the case of the European Union, the hermeneutic circle is complete. Climate politics leads to geopolitics and geopolitics leads to climate politics. Much of the recent geopolitical awakening in Brussels is climate-driven. Because Europe’s ambition to deliver on its climate goals is so heavily reliant on access to natural resources, we have suddenly entered a world that increasingly looks like the old scramble for territory. Critical raw materials are essential to the functioning and integrity of a wide range of industrial ecosystems. Tungsten makes phones vibrate. Gallium and indium are part of light-emitting diode technology in lamps. Semiconductors need silicon metal. Hydrogen fuel cells and electrolysers need platinum group metals. The climate transition will not inaugurate an age of freedom from the old need to control raw materials. The EU now admits that the only thing that has changed is the list of critical materials. From fossil fuels to metals and rare earths, but tragically Europeans will continue to be vulnerable because many of these raw materials are sourced from abroad and the global competition for access and control is becoming fiercer.
The supply of many critical raw materials is highly concentrated. For example, China provides 98% of the EU’s supply of rare earth elements, Turkey provides 98% of the EU’s supply of borate, and South Africa provides 71% of the EU’s needs for platinum and an even higher share of the platinum group metals iridium, rhodium, and ruthenium. For electric vehicle batteries and energy storage, the EU would need up to 18 times more lithium and 5 times more cobalt in 2030, and almost 60 times more lithium and 15 times more cobalt in 2050, compared to the current supply to the whole EU economy. What to do?
The situation is made all the more desperate by the fact that Europe’s main rivals are all already working to secure future supplies. They do this by controlling access to the main global producers through partnerships with resource-rich countries or strategic acquisitions, and by developing their own, internal supply chains. A recent EU document goes so far as to recommend that the EU marshal its sophisticated fleet of satellites: “Remote sensing using Europe’s earth-observation Copernicus Programme can become a powerful tool to identify new critical raw material sites, monitor the environmental performance of mines during their operating life and after closure.” In parallel, the EU will also negotiate Free Trade Agreements with a number of important countries from a raw materials perspective. Energy and economic diplomacy with third countries is important to reinforce the resilience of critical supply chains for the clean energy transition and energy security. Shifting EU import payments for critical raw materials from other international currencies to the euro would have some advantages such as reducing price volatility, and making EU importers and third-country exporters less dependent on US dollar funding markets.
We are well on our way to a world divided in regional spheres of influence, and the immediate cause is the need to deliver on climate promises and commitments. “It is important,” the European Commission claims, “to integrate the Western Balkans into EU supply chains”. Serbia, for example has borates, while Albania has platinum deposits.
There is something I would call a “technological order” which is deeper and more fundamental than political and economic orders, albeit less visible and often taken for the way nature presents itself. The last time we witnessed a change in the “technological order” was with the industrial revolutions of the modern age. The climate crisis signals a similar change: the moment when our fundamental way of relating to the natural environment is rethought and, as a result, new political and economic arrangements become both possible and necessary.
Bruno Maçães served as Portugal’s Secretary of State for European Affairs between 2013 and 2015. His new book, Geopolitics for the End Time: From the Pandemic to the Climate Crisis, will be published in September 2021, by C.Hurst & Co.